No quick fix for Jaguar's financial woes; recovery plan to be driven by new products

BRADFORD WERNLE | Automotive News Europe

Jaguar may not turn a profit for several years, the company's top executives say.

"It's not a short-term fix," said Mark Fields, chairman of Premier Automotive Group, the Ford Motor Co. unit that encompasses Jaguar, Land Rover, Volvo and Aston Martin. "I'm not saying we're going to break even in 2006, 2007 or even 2008. What I want is sequential improvement in terms of financial performance."

Fields blamed the British brand's problems on:

>>> An increasingly competitive environment as incentives move into the luxury sector.
>>> A weak American dollar.
>>> A shift in the luxury segment from sedans and sports cars to SUVs and crossovers.

Ford does not report Jaguar results separately. In British regulatory filings, Jaguar reported that in 2003 it lost £601 million, or about $1.1 billion at current exchange rates, on its United Kingdom operations. The filings do not include overseas subsidiaries.

Jaguar said in the filings that it would lose money in 2004 and 2005.

Ford has agreed to pump more money into Jaguar, but no amounts have been specified. In September, Jaguar told of a restructuring plan that included closing its assembly plant at Browns Lane in Coventry, England, with a loss of 1,150 jobs.

Production of the flagship XJ sedan will move to the nearby Castle Bromwich plant in Birmingham, England, this summer. In January 2006, Jaguar will begin producing the next-generation XK sports car in Castle Bromwich. The mid-sized S-Type sedan also is made in Castle Bromwich.

Jaguar has abandoned its goal of making 200,000 cars a year. Last year it produced about 120,000. The restructuring plan also calls for reducing inventory and steering clear of heavy incentives.

The recovery plan will be driven by new products, executives say. Jaguar introduced a concept car at the Detroit auto show, the Advanced Lightweight Coupe, that previews the next XK.

The 2+2 coupe is a step away from Jaguar's reputation as a "wood and leather" brand. Like XKEs from the 1960s, the concept features aluminum interior trim. There is no wood.

Joe Greenwell, CEO of Jaguar-Land Rover, said the company wanted to present a concept car in Detroit to show that it has a viable future. The Advanced Lightweight Coupe concept, styled by Jaguar design director Ian Callum and a small team, was designed and built in three months.

Stacy94PGT
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